Question

Presto company purchased equipment and these costs were incurred: cash price $65,000 sales taxes 3,600 insurance during transit 640 installation and testing 860 total costs $70,100 presto will record the acquisition cost of the equipment as

Answer 1

Given:
cash price $65,000
sales taxes 3,600
insurance during transit 640 i
nstallation and testing 860
total costs $70,100

Presto will record the acquisition cost of the equipment as $70,100.

Acquisition cost is the cost of buying an equipment as well as the cost paid in making sure that the equipment is in working order. A cost is recognized as a part of an acquisition cost when its absence is detrimental to the purchase of the item.